Markets in Brief

Olimpia head raking it in despite company's financial woes

While real estate company Olimpia and its subsidiary Nanette Estates owe bondholders a combined NIS 500 million, and while Olimpia posted a loss of NIS 120 million for 2011 and is operating in receivership - the wage cost of the group's controlling shareholder Oscar Kazanelson, paid by Nanette, came to NIS 5 million last year. Olimpia stumbled into difficulty following ill-advised investment in eastern Europe. But how do investors feel about the group? Well, Olimpia B2 bonds (NIS 89 million ) are trading at a gross annual yield of 207%. Olimpia B3 bonds (NIS 120 million ) are trading at a yield of 50%. Nanette B2 bonds (NIS 67 million ) are trading at a yield of 72% and its B4 bonds (NIS 61 million ) are trading at a yield of "just" 16%, which is also well into the muck of junk territory. (Ram Ozeri )

Rami Levi sells 3% of chain's stock

Rami Levi, owner of the eponymous discount-supermarket chain Rami Levi Shivuk Hashikma, advised the Tel Aviv Stock Exchange on Wednesday that he'd sold 3% of the company's stock off the floor. For NIS 38 million. Levi received NIS 127 per share. The news sent the company's stock down 1.7%, on a day that shares were losing ground, to NIS 126.80. The sale reduces Levi's stake in the company to 57.8%. It is the fourth exit he's made since floating the company in 2010. (Ram Ozeri )

Foreign direct investment shrank to $533m in February

Israel received $533 million worth of foreign direct investment through local banks in February, down from $700 million in January, the Bank of Israel said this week. More than half of that sum - some $300 million - went to the high-tech and service industries, according to the central bank. During February nonresidents bought $60 million worth of Israeli shares, and sold $1.2 billion worth of makams (short-term notes issued by the Bank of Israel ). They also sold $310 million worth of Israeli government bonds after nine months of net investment in bonds. (Reuters )

Shift to profit for Magal in Q4 of 2011

Magal Security Systems this week reported a shift to profit in the fourth quarter of 2011, boosted by strong demand across its various territories of operations. Fourth quarter net income, attributable to shareholders, rose to $4.3 million, or 27 cents a share, compared with a net loss of $1.5 million, or 14 cents per share, a year ago. The company's revenue has more than doubled to $33.7 million since then. (Reuters )

Delek Real Estate ordered to pay creditor

Delek Real Estate was foiled in its bid to bypass the High Court of Justice. The real estate company, which belongs to Yitzhak Tshuva's Delek Group of companies, must pay a creditor NIS 1.35 million, exactly as the High Court had ordered, Tel Aviv District Court Judge Varda Alshech ruled yesterday. Alshech also slapped Delek with NIS 50,000 in court costs, which is considered very high. Delek had petitioned the district court, which is discussing its proposed debt arrangement with bondholders, for permission not to pay the creditor. The company argued that the High Court ruling mistakenly prioritized this creditor above others, and asked that the creditor in question (whose lawyer describes him as disabled and living with his wife on NIS 5,900 a month ) be bundled with all other creditors in the debt arrangement. But Alshech pointed out that the creditor in question has no bonds and isn't party to the debt settlement, so should be paid. (Shelly Appelberg )

Antitrust investigation into Tnuva price hikes handed over to lawyers

The legal department of the Israeli Antitrust Authority must now determine whether legal steps should be taken, now that the authority's investigative department has wrapped up a six month probe of food manufacturer Tnuva. The probe began when Tnuva failed to hand over documents as demanded by the Antitrust Authority, which was looking into the state of the dairy market. Sources close to Tnuva say the failure was simply a good-faith mistake by a middle manager. The documents in question were regarding a report from international consulting firm McKinsey & Company. The report said that one way for Tnuva to boost profitability would be to raise prices of products with inelastic demand, such as cottage cheese and yellow cheese, by at least 15%. Tnuva's cottage cheese price hike to NIS 8 per 250 grams is what originally triggered last year's cost-of-living protests. The company has a monopoloy over the dairy product. The Antitrust Authority was seeking the McKinsey documents so that it could complete its report on whether Tnuva abused its powerful position in the dairy market to rake in excessive profit. (Ora Coren )

Covidien closes $300m acquisition of Oridion Systems

U.S. healthcare products and medical devices maker Covidien said it would buy Israel-based Oridion Systems for about $300 million in cash, conferring a premium of about 70% over Oridion's market value. As per the deal, a wholly owned subsidiary of Covidien will pay $23 per Oridion share. "Oridion's products are excellent complements to the company's current portfolio of pulse oximeters and monitoring products," Robert White, president of Covidien's Respiratory & Monitoring Systems, said in a statement. Covidien will report the Oridion Systems business as part of its oximetry and monitoring product line. The companies expect to complete the deal in the second calendar quarter of 2012. (Reuters )